Upside Ahead? Stellar Rally Fizzles But Lumen Could Regain Luster

After rising to $0.05 last week, the value of the native token that runs the Stellar protocol is down 36 percent from that recent high today. At press time, the stellar-US dollar (XLM/USD) exchange rate is $0.033. Week-on-week, XLM is down 8.33 percent, while on a monthly basis, it is up 177 percent.

The decline follows XLN’s rally of more than 100 percent on Oct. 16 after news hit the wires that IBM and Stellar were testing the cryptocurrency for cross-border payments.

Currently, the project is designed to handle South Pacific currencies – Australian dollar, the New Zealand dollar and the Tonga pa’anga. Through Stellar’s lumen, consumers will be able to trade fiat currencies without even touching the cryptocurrency.

Still, while the market euphoria in response to the news is calming at press time, the price of lumens is holding above the key support level of $0.02755.

What does this mean for traders ahead? Price action analysis suggests the decline from $0.05 could be a bear trap, and that there is a potential for another boost if support holds.

Daily chart

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A rebound from the support offered by Aug. 5 high of $0.02755 followed by a move above $0.04 would open doors for $0.05 (Oct. 16 high). A violation there would open up upside towards $0.05782 (June 8 high).

On the downside, only a break below $0.02 would signal a short-term bullish-to-bearish trend change.

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Source: The Global Blockchain

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.